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Money laundering

Region: Ontario Answer # 7602

Money laundering occurs when criminal organizations or white-collar criminals (the primary motive of the crime is usually financial in nature) make illegally obtained money appear legitimate. If you have been charged with a criminal offence such as money laundering, it is important to hire an experienced criminal defence lawyer as soon as possible.

How does money laundering occur?

The process to launder money typically involves several stages:

  • Placement

The first stage of money laundering is placement, where the illicit funds are introduced into the financial system. This can be done through various means, such as depositing cash into bank accounts, purchasing assets, or using money transfer services. Criminals often choose methods that make it difficult to trace the origin of the funds.

  • Layering

The second stage is layering, where the money is moved through a series of complex transactions to obscure its source. This involves creating multiple layers of transactions, such as transferring funds between different accounts, making investments, or conducting international wire transfers. The purpose of layering is to make it challenging for authorities to trace the funds back to their illegal origins.

  • Integration

The final stage is integration, where the laundered money is reintroduced into the legitimate economy. This can be done through various means, such as investing in businesses, purchasing real estate, or making high-value purchases. By integrating the funds into legitimate assets or activities, criminals aim to legitimize the illicit proceeds and make them difficult to distinguish from legal funds.

What is the law?

The Criminal Code is the primary legislation that addresses money laundering offences. It outlines the various activities that constitute money laundering and the penalties associated with them.

Under Section 462.31 of the Code, it an offence to be involved in any way with the laundering of the proceeds of crime. Specifically,

Laundering proceeds of crime

  • 31(1) Every one commits an offence who uses, transfers the possession of, sends or delivers to any person or place, transports, transmits, alters, disposes of or otherwise deals with, in any manner and by any means, any property or any proceeds of any property with intent to conceal or convert that property or those proceeds, knowing or believing that, or being reckless as to whether, all or a part of that property or of those proceeds was obtained or derived directly or indirectly as a result of
    • (a)the commission in Canada of a designated offence; or
    • (b)an act or omission anywhere that, if it had occurred in Canada, would have constituted a designated offence.


(2) Every one who commits an offence under subsection (1)

  • (a)is guilty of an indictable offence and liable to imprisonment for a term not exceeding ten years; or
  • (b)is guilty of an offence punishable on summary conviction

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

The federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) exists to combat the laundering of proceeds of crime and the financing of terrorist activities in Canada.

Under the Act, certain types of businesses, such as financial institutions, life insurance companies, and accountant and accounting firms are required to file reports to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), when large cash transactions occur ($10,000 or more in cash in a single transaction). FINTRAC reviews the reports and determines whether the transaction might involve criminal or terrorist activity financing.

According to FINTRAC, the objectives of the Act are:

  • to implement specific measures to detect and deter money laundering and the financing of terrorist activities
  • to respond to the threat posed by organized crime by providing law enforcement officials with the information they need to investigate and prosecute money laundering or terrorist financing offences,
  • to assist in fulfilling Canada’s international commitments to participate in the fight against transnational crime, particularly money laundering and the fight against terrorist activities

Penalties for contravening the Act include fines up-to $500,000 and imprisonment for a term of not more than five years, or to both, if convicted of an indictable offence.

Visit FINTRAC for more information.

What are common money laundering schemes?

Money laundering schemes can take various forms. Some common schemes include:

  • structuring transactions to avoid reporting requirements,
  • using shell companies (a business that is formed that has no actual business operations – lives only on paper) to disguise the origin of funds, and
  • layering funds through multiple transactions to obscure their source

Get help

To erase your criminal record, call toll-free 1-888-808-3628 or learn more at Pardon Partners. It’s easier than you think.

If you have been charged with a criminal offence, it is important to hire an experienced criminal defence lawyer as soon as possible. Contact our preferred criminal defence expert, Calvin Barry Criminal Lawyers for a free consultation at 416-938-5858 .

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